SDRL 10-K & 10-Q changes, risk factors and insider trading

•the ability or willingness of the Organization of the Petroleum Exporting Countries ("OPEC"), and other non-member nations, including Russia, to set and maintainmaintain, or to be influenced to set and maintain, levels of production and pricing, and the level of production in non-OPEC countriescountries, including the ability of OPEC to successfully coordinate and enforce production quotas;

•worldwide economic and financial problems, including, for example, inflationary pressures andpressures, supply chain disruptions,disruptions and disruptions in global trade (including as a result of trade policies, tariffs and other trade restrictions), the resulting fears of recession and the corresponding decline in the demand for oil and gas and, consequently, our services;

•the worldwide political and military environment, including uncertainty or instability resulting from civil disorder, geopolitical instability, border disputes or an escalation or additional outbreak of armed hostilities or other crises in the Middle East, Eastern EuropeEurope, Central and South America, or other geographic areas or acts of terrorism in the United States, Europe or elsewhere, including, for example, the ongoing conflicts in Ukraine and the Middle East and the Guyana-Venezuela dispute, and their respective regional and global ramifications.

In the past several years, the pace of consolidation in our industry has increased, and may continue to increase, leading to the creation of a number of larger and financially stronger competitors. For example, in February 2026, two of our competitors announced the signing of a definitive agreement to combine. If we are unable, or our customers believe that we are unable, to compete with the scale and financial strength of certain of our competitors, it could harm our ability to maintain existing drilling contracts and secure new ones. Moreover, business consolidations within the oil and gas industry in recent years have resulted in exploration and production companies combining and using their size and purchasing power to seek economies of scale and pricing concessions. Continuing consolidation within the oil and gas industry may result in reduced capital spending by some of our customers or the acquisition of one or more of our primary customers, which may lead to decreased demand for our services. There is no assurance that we will be able to maintain our level of activity with a customer after its consolidation with another company or replace that revenue with increased business activity with other customers. As a result, such consolidation in our industry, and the oil and gas industry may have a significant adverse impact on our business, results of operations, financial condition and cash flows. We are unable to predict what effect consolidations in these industries may have on prices, capital spending by our customers, our competitive position, our ability to retain customers or our ability to negotiate favorable agreements with our customers.

The shipment of goods, services and technology across international borders subjects our business to extensive trade laws and regulations. Import activities are governed by unique customs laws and regulations in each of the countries of operation. Moreover, many countries,countries and governing bodies, including the United States, the United Kingdom (the "U.K.") and the European Union (the "EU"), control the export, re-export and transfer (in country) of certain goods, services and technology and impose related export recordkeeping and reporting obligations. Governments alsoand governing bodies may also impose trade and economic sanctions against certain countries, persons and other entities that restrict or prohibit transactions involving such countries, persons or entities. For example, the U.S. government has imposed sanctions that are designed to restrict or prohibit doing business in certain countries that are heavily involved in the petroleum and petrochemical industries, which includes drilling activities.

The laws and regulations concerning import and export activity and economic sanctions are complex and constantly changing, and we cannot predict what changes will be made by the U.S.U.S., U.K., EU or other governments, nor can we predict the effects that any such changes would have on our business. Shipments can be delayed and denied export or entry for a variety of reasons, some of which are outside our control and some of which may result from the failure to comply with existing legal and regulatory regimes. Shipping delays or denials could cause unscheduled operational downtime. Any failure to comply with applicable legal and regulatory obligations could also result in criminal and civil penalties and sanctions, such as fines, imprisonment, debarment from government contracts, the seizure of shipments, and the loss of import and export privileges.

Changes in government policies on foreign trade and investment can also affect the demand for our services, impact the competitive position of our services or prevent us from being able to sell services in certain countries. Our business benefits from free trade agreements, and efforts to withdraw from or substantially modify such agreements, in addition to the implementation of more restrictive trade policies, such as more detailed inspections, higher tariffs, import or export licensing requirements, economic sanctions, anti-boycott laws, exchange controls or new barriers to entry, could have a material adverse effect on our business, financial condition and results of operations. For example, on February 1,in 2025, the Trump Administration issuedannounced executive orders imposingadditional tariffs on certain products importedgoods from China,all Canadacountries and Mexicopursuant to the UnitedInternational States.Emergency Economic Powers Act. These newtariffs were later found to have exceeded presidential authority and were invalidated by the courts. Following the ruling, President Trump has indicated a desire to implement a 150-day "global tariff" of 10% to 15%, using presidential powers under the Trade Act of 1974, and to seek to extend such tariffs under other statutes. Such tariffs may put upwards pressure on the prices of goods and services across the jurisdictions in which we operate, including those we source from third-party providers (as defined below), which could reduce our ability to offer competitive pricing to potential customers. In addition, the scope and durability of existing and future tariff measures remain uncertain. We cannot predict what otherfuture changes to trade policy will be made by the Trump Administration, the U.S. Congress or other governments,policy, including whether existing or future tariff policies will be maintained or modified or whether the entry into new bilateral or multilateral trade agreements will occur, nor can we predict the effects that any such changes would have on our business. Changes in U.S. trade policy have resulted and could again result in reactions from U.S. trading partners, including adopting responsive trade policies making it more difficult or costly for us to conduct business across the jurisdictions in which we operate or source goods and services from third-party providers. SuchThese changes in trade policy or in laws and policies governing foreign trade,changes, and any resulting negative sentiments or retaliatory trade practices towards the United States as a result of such changes,States, could materially and adversely affect our business, financial condition and results of operations.

IncreasingChanging attentionsentiments with respect to environmental, social and governance matters and climate change may impact us.

Companies across all industries are facingexperiencing increasingchanging sentiments and scrutiny relating to their ESG policies, including those related to climate change, sustainability, diversity and inclusion initiatives and heightened governance standards. InvestorCertain investor advocacy groups, certain institutional investors, investment funds, lenders and other market participants and certain regulators are increasingly focused on ESG practices and in recent years have placed growing importance on the implications and social cost of their investments. The increased focus and activism related to ESG and similar matters may hinder access to capital as investors and lenders may decide to reallocate capital or not to commit capital as a result of their assessment of a company’s ESG practices. Companies that do not adapt to or comply with investor, lender or other industry shareholder expectations and standards, which are evolving, or which are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, may suffer from reputational damage and the business, financial condition or share price of such a company could be materially and adversely affected.

We may face increasing pressures from investors, lenders and other market participants,participants and certain regulators, who are increasingly focused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability. As a result, we may be required to implement more stringent ESG procedures or standards, or reduce or offset our greenhouse gas emissions, so that our existing and future investors and lenders remain invested in us and make further investments in us. We may also be subject in the future to additional reporting requirements that are developing in response to such increased focus. If we do not take these measures or comply with the additional reporting requirements, our business or our ability to access capital could be harmed.

We have developed, and we willmay continue to develop, goals, and other objectives related to sustainability matters, including those discussed in our annual sustainability reports. Statements related to these goals and objectives are made using various underlying assumptions and reflect our current intentions, and do not constitute a guarantee that they will be achieved. Our ability to achieve any stated goal or objective is subject to numerous factors and conditions, many of which are outside of our control, including the availability of technologies and processes to reduce fuel use and improve energy efficiency on our rigs. Due to the interaction of numerous factors beyond our control we cannot predict the ultimate impact of setting or achieving sustainability goals, or the various implementation aspects, on our financial condition and results of operations.

Our business may face increased scrutiny from investors and other stakeholders related to our sustainability activities, including the goals and other objectives that we announce, and our methodologies and timelines for pursuing them. If our sustainability assumptions or practices do not meet investorinvestor, regulatory or other stakeholder expectations and standards, which continue to evolve, our reputation, our ability to attract or retain employees and our attractiveness as an investment or business partner could be negatively affected. Similarly, our failure or perceived failure to pursue or fulfill our sustainability focused goals and objectives, to comply with ethical, environmental or other standards, regulations or expectations, or to satisfy various reporting standards with respect to these matters, within the timelines dictated by regulations, timelines we voluntarily announce, or at all, could adversely affect our business or reputation, as well as expose us to government enforcement actions and private litigation.

In addition, our customers continue to seek more favorable terms with respect to allocation of risk under offshore drilling contracts. Our drilling contracts provide for varying levels of risk allocation and indemnification from our customers. Our customers have historically assumed most of the responsibility for and indemnified us from loss, damage or other potential liabilities. However, we regularly are required to assume liability for pollution and environmental damage caused by our negligence, which liability generally has caps; though in the event the damage is caused by our gross negligence or willful misconduct, our liability may not be limited. We still face resistance from some customers when attempting to reduce our contractual risk allocation, including when we seek to mitigate our liability exposure in relation to potential damages resulting from pollution or contaminationenvironmental damage and negotiating lower caps for damage caused by our gross negligence or willful misconduct. Our contracts may also be subject to courtjudicial assessmentreview and application of public policy principles whereby arelevant courtauthorities could decide that certain contractual indemnities in current or future contracts are not enforceable. Going forward, we could decide or be required to accept more contractual risk in the future, resulting in higher risk of losses, which could be material.

The offshore drilling markets in which we compete experience fluctuations in the demand for drilling services. Our ability to renew expiring drilling contracts or obtain new drilling contracts depends on the prevailing or expected market conditions. As of December 31, 2024,2025, we owned a total of 15 drilling units, of which 1110 were operating (inclusive ofoperating, one leased to the Sonadrill joint venture), one 6th generation drillship was undergoing contractcapital preparationsupgrade projects for a contract thatcommencing commencedin duringthe Februarysecond 2025,quarter of 2026, one was undergoing repairs and maintenance projects and three were cold stacked. The 1110 operating units include 10nine benign floaters (comprising sevensix 7th generation drillships, two 6th generation drillships and one benign environment semi-submersible) and one harsh environment unit (comprising of one jackup).jackup. In addition to our owned assets, as of December 31, 2024,2025, we managed two drilling units owned by Sonangol. Of the 12 owned rigsdrilling units either currently or future contracted, we expect fourfive will become available before the end of 2025.2026. We may be unable to obtain drilling contracts for our rigsdrilling units that are currently operating upon the expiration or termination of such contracts, and there may be a gap in the operation of the rigs between the current contracts and subsequent contracts. When oil and natural gas prices are low or it is expected that such prices will decrease in the future, we may be unable to obtain drilling contracts at attractive dayrates or at all. We may not be able to obtain new drilling contracts with the terms or dayrates sufficient to support a reactivation of a cold-stacked rig. Likewise, we may not be able to obtain new drilling contracts in direct continuation with existing contracts, or depending on prevailing market conditions, we may enter into drilling contracts at dayrates substantially below the existing dayrates or on terms otherwise less favorable compared to existing contract terms, which may have an adverse effect on our financial position, results of operations or cash flows.

Our operations are subject to hazards inherent in the drilling industry, such as blowouts, reservoir damage, loss of well control, lost or stuck drill strings, equipment defects, punch-throughs, cratering, fires, explosions and pollution, among others. Contract drilling and well servicing requires the use of heavy equipment and exposure to hazardous conditions, which may subject us to liability claims by employees, customers or third parties. These hazards can cause personal injury or loss of life, severe damage to or destruction of property and equipment, or pollution, environmental or natural resource damage, resulting in claims by third parties or customers, investigations and other proceedings by regulatory authorities, which may involve fines and other sanctions, and suspension of operations. Our offshore fleet is also subject to hazards inherent in marine operations, such as capsizing, sinking, grounding, collision, damage from severe weather (which may be more acute in certain areas where we operate and which some experts believe may increase in frequency and severity due to climate change ) and marine life infestations. Operations may also be suspended because of machinery breakdowns, abnormal drilling conditions, failure of subcontractors to perform or supply goods or services or personnel shortages. We customarily provide contract indemnification to our customers for claims relating to damage to or loss of our equipment, including rigs and claims relating to personal injury or loss of life.

Our contract drilling business is subject to the risks associated with having a limited number of customers for our services. For the year ended December 31, 2024,2025, our largest customers, which individually contributed more than 10% of our total revenues, were SonadrillPetrobras, Sonadrill, Talos and Petrobras,LLOG and accounted for approximately 40%79% of our total revenues in aggregate. In addition, mergers and acquisitions, or other forms of consolidation among oil and gas exploration and production companies will further reduce the number of available customers, which would increase the ability of potential customers to achieve pricing terms favorable to them. Our operating results could be materially adversely affected if any of our major customers fail to compensate us for our services or take actions outlined above. Please see "Our customers may seek to cancel or renegotiate their contracts to include unfavorable terms such as unprofitable rates, particularly in the circumstance that operations are suspended or interrupted" and “Consolidation in our industry may impact our results of operations” above for more information.

We are subject to risks of loss resulting from non-payment, non-performance or offset by our customers and certain other third parties (including third parties providing services under various services agreements). Please see "Note 2724 – "Commitments and contingencies" to our consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this annual report for a discussion of the Sete Brazil matter. Some of these customers and other parties may be highly leveraged and subject to their own operating and regulatory risks. If any key customers or other parties default on their obligations to us, our financial results and condition could be adversely affected. Any material non-payment or non-performance by these entities, other key customers or certain other third parties could adversely affect our financial position, operating results and cash flows.

Additionally, the concentration of operations in specific geographies increases the risks associated with terrorism, piracy, political or social unrest, changes in local laws and regulations, as well as severe weather events within those regions, should they occur. If we were forced to cease drilling operations in any of these regions for any reason and we were not able to redeploy to other regions promptly, our financial condition and results of operations could be materially adversely affected. For the year ended December 31, 2024,2025, operations in the Brazil, United States, BrazilStates and Angola accounted for approximately 26%,43%, 25%26% and 24%,23%, respectively, of our revenues in the aggregate.

Inflationary factors such as increases in labor costs, material costs and overhead costs have adversely affected, and may in the future adversely affect, our operating results. Inflationary pressures may also increase other costs to operate or reactivate our drilling units. Our contracts for our drilling units generally provide for the payment of an agreed dayrate per rig operating day. As a result, we may not be able to fully recover increased costs due to inflation from our customers. Continuing or worsening inflation could significantly increase our operating expenses and capital expenditures, which could in turn have a material adverse effect on our business, financial condition, results of operations or cash flows. Our customers may also be affected by inflation and the rising costs of goods and services used in their businesses, which could negatively impact their ability to purchase our services, which could adversely impact our business, financial condition, results of operations or cash flows. In addition, changing and future monetary policies and actions of the U.S. and other governments (such as raises to the target federal funds rate) could adversely affect our ability to obtain financing and raise our (or our customers’) cost of capital. Obligations under our revolving credit facility and certain of our other indebtedness bear interest at a floating rate of interest, and inflationary factors can lead to increases in the federal funds rate and the base rate under the applicable debt instruments, which will increase our cost of capital and the amount of our cash flow that must be used to service interest on our debt.

We may be unable to implement these merger, acquisition and disposition elements of our strategy if we cannot identify suitable companies, businesses or assets, reach agreement on potential strategic transactions on acceptable terms, manage the impacts of such transactions on our business, obtain required consents under our debt agreements or for other reasons. Moreover, mergers, acquisitions, dispositions and other strategic transactions involve various risks, including, among other things, (i) difficulties relating to integrating or disposing of a business,business or assets, including changes to our employee workforce and unanticipated changes in customer, vendor and other third-party relationships, (ii) failure to integrate operations and internal controls, including those related to financial reporting, disclosure and cybersecurity and data protection, (iii) the assumption of liabilities as a result of these transactions, (iv) diversion of management’s attention from day-to-day operations, (v) failure to realize the anticipated benefits of such transactions, such as cost savings and revenue enhancements, (vi) potentially substantial transaction costs associated with such transactions, (vii) failure to identify significant losses at the target during the due diligence process, which could result in financial or legal exposure, (viii) applicable antitrust laws and other regulations that may limit our ability to acquire targets or require us to divest an acquired business or assets, (ix) potential impairment resulting from the overpayment for an acquisition and (ixx) the risk that any such strategic transaction may not close on its expected timeframe or at all, in each case, the realization of which could have a material adverse effect on our business. While we generally seek to obtain indemnities for liabilities arising from events occurring before such transactions, we may be unable to do so, and any indemnities we do obtain, will be limited in amount and duration, may be held to be unenforceable or the seller may not be able to indemnify us. Such transactions may also affect the diversification of our drilling unit fleet, which may leave us vulnerable to risks related to lack of diversification. See "Our drilling unit fleet is largely concentrated to benign floaters, which leaves us vulnerable to risks related to lack of diversification."

•import-export quotas, wage and price controls, and the imposition of sanctionssanctions, tariffs or other trade restrictions;

•U.S., theU.K., United Kingdom (the "U.K."), the European Union (the "EU") and other foreign sanctions;

•compliance with and changes in regulatory or financial requirements, including local ownership, presencepresence, local immigration, visa requirements for personnel or labor requirements;

For example, we operate in Brazil; the Brazilian government frequently intervenes in the country’s economy and occasionally makes significant changes in policy and regulations, including, for example, (i) the changes in Brazilian laws related to the importation of rigs and equipment that may impose bonding, insurance or duty-payment requirements and (ii) its actions to control inflation and other policies and regulations which have often involved, among other measures, changes in interest rates, changes in tax policies, changes in legislation, wage controls, price controls, currency devaluations, capital controls and limits on imports of goods and services. The drilling industry in Brazil is also subject to the regulations of the National Agency for Petroleum, Natural Gas and Biofuels ("ANP"),ANP, which is the regulatory body for the activities within the oil, natural gas and biofuels industries in Brazil. ANP has the ability to suspend operations in Brazil when deviations from regulations or safety procedures are identified as imposing a grave and imminent risk to people, the environment or installations. For the year ended December 31, 2024,2025, 25%43% of our revenues were derived from our Brazilian operations. These and other developments in political, economic, regulatory and governmental conditions may, directly or indirectly, adversely affect our business, financial condition, and operating results.

The operation of our drilling units will require certain governmental approvals, the number and prerequisites of which cannot be determined until we identify the jurisdictions in which we will operate once contracts for the drilling units are secured. Some foreign governments currently favor or effectively require (or based upon the changes to laws, regulations or interpretations thereof, may in the future favor or effectively require) (i) the awarding of drilling contracts to local contractors or to drilling units owned by their own citizens, (ii) the use of a local agent or (iii) foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction. These practices may adversely affect our ability to compete in those regions. We cannot predict whether any changes to laws, regulations or interpretations thereof would result in modifications to our operations nor whether any such modifications would have a material impact on our business. Depending on the jurisdiction, these governmental approvals may also involve public hearings and costly undertakings on our part. We may not obtain such approvals, or such approvals may not be obtained in a timely manner. If we fail to secure the necessary approvals or permits in a timely manner, our customers may have the right to terminate or seek to renegotiate their drilling contracts to our detriment.

It is difficult to predict what government regulations may be enacted and their potential adverse effects on the international drilling industry. The actions of foreign governments and other organizations, including initiatives by OPEC, may adversely affect our ability to compete. Failure to comply with applicable laws and regulations, including those relating to sanctionssanctions, tariffs and other trade, import or export restrictions, may subject us to criminal or civil proceedings and related liability, including fines and penalties, the denial of export privileges, injunctions or seizures of assets, and may affect the availability of our existing financing arrangements and our ability to secure financing in the future.

The offshore drilling industry is a global market requiring flexibility for rigs, depending on their technical capability, to relocate and operate in various environments,environments and jurisdictions, moving from one area to another. The mobilization of rigs is expensive and time-consuming and can be impacted by several factors including, but not limited to, governmental regulation and customs practices, availability of tugs and tow vessels, weather, currents, political instability, civil unrest, and military actions, such as the ongoing conflicts in Ukraine and the Middle East, and rigs may become stranded as a result. Some jurisdictions enforce strict technical requirements that necessitate substantial physical modifications to the rigs before they can be utilized. Such modifications may require significant capital expenditures, and as a result, may limit the use of the rigs in those jurisdictions in the future. In addition, mobilization carries the risk of damage to the rig. Failure to mobilize a rig in accordance with the deadlines set by a specific customer contract could result in a loss of compensation, liquidated damages or the cancellation or termination of the contract. In some cases, we may not be paid for the time that a rig is out of service during mobilization. In addition, in the hope of securing future contracts, we may choose to mobilize a rig to another geographic market without a customer contract in place. If customer contracts were not obtained, we would be required to absorb these costs. Mobilization and relocation activities could therefore potentially have a materially adverse effect on our business, financial condition, and results of operations.

Compliance with such laws, regulations and standards, where applicable, may require installation of costly equipment or implementation of operational changes and may affect the resale value or useful life of our drilling units. These costs could have a material adverse effect on our business, operating results, cash flows and financial condition. A failure to comply with applicable laws and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our operations. Because such laws, regulations and standards are often revised, we cannot predict the ultimate cost of complying with them or the impact thereof on the resale prices or useful lives of our rigs. Additional laws, regulations and standards may be adopted which could limit our ability to do business or increase the cost of our, or our customers, doing business and which may materially adversely affect our operations. For example, in April 2024, the U.S. Bureau of Ocean Energy Management ("BOEM") published a final rule, which took effect June 29, 2024, that updates requirements for the posting of bonds and other financial assurance for oil, gas and sulfur lessees and certain other parties operating in the offshore Outer Continental Shelf, which could increase bonding requirements and other financial assurance for some of our customers. BOEM is still in the process of implementing the 2024 rule. However, as announced in May 2025, BOEM is also in the process of a proposed rulemaking that would revise the 2024 rule.

Failure to adequately protect our sensitive information, operational technology systems and critical data, or our service providers’ failure to protect their systems and datadata, could have a material adverse effect on us.

Also, many of our non-operational employees travel and spend a significant amount of their time working remotely to support our operations, which has created or otherwise heightened certain operational risks, such as an increased risk of security breaches, cyberattacks or other cyber incidents, loss of data, fraud and other disruptions. Remote connectivity outside of Seadrill offices has resulted in an increased demand for technological barriers and training and exposes us to different threat vectors of cyberattacks or other cyber incidents, security breaches, loss of data, fraud and other disruptions as a consequence of more employees accessing sensitive and critical information remotely. Due to the nature of cyber-attacks, breaches to our systems or our service or equipment providers’ systems could go undetected for a prolonged period of time. A breach could also compromise or originate from our customers’, vendors’, or other third-party systems or networks outside of our control. A security breach may result in legal claims or proceedings against us by our shareholders, employees, customers, vendors and governmental authorities, both in the U.S. and internationally.

While we maintain a cybersecurity program, which includes administrative, technical, and organizational safeguards, a significant cyberattack or other cyber incident (whether involving our systems, those of a critical third-party, or both) could disrupt our operations and result in downtime, loss of revenue, harm to the Company’s reputation, or the loss, theft, corruption or unauthorized or unlawful release of critical data of us or those with whom we do business, as well as result in higher costs to correct and remedy the effects of such incidents, including potential extortion payments associated with ransomware or ransom demands. If our, or our service or equipment providers’, safeguards maintained for protecting against cyber incidents or attacks prove to be insufficient, and an incident were to occur, it could have a material adverse effect on our business, financial condition, reputation, and results of operations. Additionally, it may be difficult to determine the best way to investigate, mitigate, contain, and remediate the harm caused by a cyber incident. Such efforts may not be successful, and we may make errors or fail to take necessary actions. It may take considerable time for us to investigate and evaluate the full impact of incidents, particularly for sophisticated attacks. These factors may inhibit our ability to provide prompt, full, and reliable information about the incident to our customers, partners, regulators, and the public. Even though we carry cyber insurance that may provide insurance coverage under certain circumstances, we might suffer losses as a result of a security breach or cyber incident that exceeds the coverage available under our policy or for which we do not have coverage, and we cannot be certain that cyber insurance will continue to be available to us on commercially reasonable terms, or at all. See Part I, Item 1C, "Cybersecurity" of this annual report for a description of our cybersecurity policies and procedures.

In addition, a patchworkvariety of laws and regulations governing, or proposing to govern, cybersecurity, data privacy and protection, and the unauthorized disclosure of confidential or protected information, including the U.K. Data Protection Act, the General Data Protection Regulations (EU) 2016/679, Bermuda Personal Information Protection Act 2016, the California Consumer Privacy Act,Act (as amended by the California Privacy Rights Act), the Cyber Incident Reporting for Critical Infrastructure Act, and other similar legislation in domestic and international jurisdictions poseposes increasingly complex compliance challenges and potentially elevate costs, and any failure to comply with these laws and regulations could result in significant penalties and legal liability.costs. Additionally, new regulations or legislation may affect our current uses of protected information and require us to modify how we collect, protect, process or disclose such information. These laws and regulations are continuously evolving and developing, creating significant uncertainty as privacy and data protection laws may be interpreted and applied differently from country to country and may create inconsistent or conflicting requirements. Any failure, or perceived failure, by us or third-party service providers to comply with our privacy or security policies or privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personal data, may result in loss of revenue, reputational harm, and could be subject to legal or regulatory claims or proceedings, including enforcement actions under data privacy or disclosure regulations, which may result in significant expenditures, fines, or liabilities and could have an adverse effect on our results of operations and financial condition.

Any violation of anti-bribery, anti-corruptionanti-corruption, anti-fraud or ethical business practice laws and regulations could have a negative impact on us.

We operate in countries known to have a reputation for corruption. We are subject to the risk that we, our affiliated entitiesentities, agents, service providers or their respective officers, directors, employees and agents may take action determined to be in violation of such anti-corruption laws, including the U.S. Foreign Corrupt Practices Act of 1977 (the "US Foreign Corrupt Practices Act"), the United Kingdom Bribery Act 2010 (the "UK Bribery Act"), the Bermuda Bribery Act 2016 or other applicable anti-bribery and anti-corruption laws to which we may be subject (collectively, the "Legislation"). Any violation of the Legislation could result in substantial fines, sanctions, civil /or criminal penalties and, curtailment of operations in certain jurisdictions and, in turn, might adversely affect our business, financial condition and results of operations. In addition, actual or alleged violations could damage our reputation and ability to do business. Further, detecting, investigating and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management.management or Board.

We are also subject to a number of modern slavery, human trafficking and forced labor reporting, training and due diligence laws, such as the U.S. Uyghur Forced Labor Prevention Act and the U.K.’s Modern Slavery Act 2015 and similar legislation, in various jurisdictions and expect additional statutory regimes to combat these crimes to be enacted in the future. If we or our business partners fail to comply with applicable laws, regulations, safety codes, employment practices or human rights standards, our reputation and image could be harmed, and we could be exposed to litigation. Compliance with laws could increase costs of operations and reduce profits.

From time to time, we may enter into drilling contracts with countries or government-controlled entities that are subject to sanctions, export restrictions and embargoes imposed by the U.S. government or identified by the U.S. government as state sponsors of terrorism, provided entering into such contracts would not violate U.S. law. We may also enter into drilling contracts involving operations in countries or with government-controlled entities that are subject to sanctions and embargoes imposed by the U.S. government or identified by the U.S. government as state sponsors of terrorism, provided that entering into such contracts would not violate U.S. law. However, this could negatively affect our ability to obtain investors. In some cases, U.S. investors would be prohibited from investing in an arrangement in which the proceeds could directly or indirectly be transferred to or may benefit a sanctioned entity. Moreover, even in cases where the investment would not violate U.S. law, potential investors could view such drilling contracts negatively, which could adversely affect our reputation and the market for Shares. We do not currently have any drilling contracts involving operations in countries or with government-controlled entities that are subject to sanctions and embargoes imposed by the U.S. government or identified by the U.S. government as state sponsors of terrorism nor do we have any plans to initiate such contracts.

From time to time, we may hold investments in other companies in our industry that operate offshore drilling units with similar characteristics to our fleet of rigs or deliver various other oilfield services. As of December 31, 2024,2025, we held equity interests in Sonadrill, where we provide various services ,services, including the provision of operating and technical support and management and administrative services agreements. As of December 31, 2024,2025, the carrying value of this equity method investment was $68$58 million.

The market value of such equity interests havehas been, and may continue to be, volatile and has fluctuated, and may continue to fluctuate, in response to changes in oil and gas prices and activity levels in the offshore oil and gas industry. If we sell our equity interests in an investment at a time when the value of such investment has fallen, we may incur a loss on the sale or an impairment loss being recognized, ultimately leading to a reduction in earnings.

We are aware of the increasing focus of local, state, regional, national and international regulatory bodies on greenhouse gas emissions and climate change issues. For example, legislation to regulate greenhouse gas emissions and reporting obligations with respect thereto have periodically been introduced in the U.S. Congress or proposed by the U.S. Securities and Exchange Commission and such legislation and reporting obligations may be proposed or adopted in the future. On March 6, 2024, the U.S. Securities and Exchange Commission adopted final rules that willwould require a registrant to disclose, among other things: material climate-related risks; activities to mitigate or adapt to such risks; information about the registrant's board of directors' oversight of climate-related risks and management's role in managing material climate-related risks; and information on any climate-related targets or goals that are material to the registrant's business, results of operations, or financial condition. However, on March 27, 2025, the SEC voluntarily stayed implementation of the final rules pending completion of judicial review; pending before the Eight Circuit Court of Appeals, and weon July 23, 2025, the SEC filed a status report requesting that the Eighth Circuit proceed with the case and issue an opinion on the challenges to the climate disclosure rules. On September 12, 2025, the Eighth Circuit denied the SEC’s request to proceed with the case and indicated that the case would be held in abeyance until the SEC either renews its defense of the rules or revises the rules via notice-and-comment rulemaking. We cannot predict whether the Trumpultimate Administrationdisposition may seek to overturnof the final rules.

Additionally,In the United States has been a member of the “Paris Agreement” that requires member countriesaddition to review and “represent a progression” in their intended nationally determined greenhouse gas contributions, which set many new goals, including greenhouse gas emission reduction goals every five years, with the next review occurring in 2025; however, on January 20, 2025, President Trump signed an executive order directing (i) submittal of a formal notification of withdrawal from the Paris AgreementAgreement, the Trump Administration has taken a number of other actions signaling a shift in the United States’ energy and (ii) the U.S. to consider withdrawal from such agreement and obligations thereunder to be effective immediately. In December 2023, the international community, including over 190 governments, gathered in Dubai at COP28 and announced a new climate dealchange thatpolicies. calls on countries to ratchet up action on climate, including actions towards tripling renewable energy capacity and doubling energy efficiency improvements at a global level, before 2030 and ultimately to reduce carbon emissions and transition away from fossil fuels in energy systems to achieve "net zero" by 2050. More recently, however, onOn January 20, 2025, the Trump Administration issued an executive order that initiated the process to withdraw the United States from the Paris Agreement, mandated ending the United States’ financial commitments under the UN Framework Convention on Climate Change,Change ("UNFCCC") and revoked the U.S. International Climate Finance Plan. In additionaddition, toin the executive order mentioned above, as of January 25,early 2025, the Trump Administration had issued a series of executive orders that signalsignaling a shift in the United States’ energy and climate change policies. Among other directives, such executive orders: (i) direct federal agencies to identify and exercise emergency authorities to facilitate conventional energy production, transportation and refining, and call for the use of emergency regulations to expedite energy infrastructure projects; (ii) promote energy exploration and production on federal lands and waters; (iii) mandate a review of existing regulations that may burden domestic energy development; and (iv) pause the disbursement of funds appropriated through the Inflation Reduction Act of 2022 (the "Inflation Reduction Act") and the Infrastructure Investment and Jobs Act. It is not possible to predict the impact of the Trump Administration on these climate and energy initiatives at this time. On January 7, 2026, President Trump issued a Presidential Memorandum entitled "Withdrawing the United States from International Organizations, Conventions, and Treaties that Are Contrary to the Interests of the United States," which directs executive agencies to take immediate steps to remove the United States from 66 listed treaties or organizations, including the UNFCCC and the Intergovernmental Panel on Climate Change ("IPCC"). While the Trump Administration may seek to reverse some or all of the initiatives advanced by the Biden Administration, it is unknown whether such reversals will ultimately be successful, and these or additional changes in the future could impact our business and operations, and those of our customers.

With respect to the shipping and offshore drilling industries, in particular, governing bodies have, from time to time, put in place regulatory frameworks and measures, and may in the future propose and adopt others, that materially burden, limit or prohibit shipping or offshore drilling operations in certain areas. For example, a number of countries, the EU and the United Nations’ International Maritime Organization (the "IMO") have adopted, or are considering the adoption of, regulatory frameworks to reduce greenhouse gas emissions in the shipping industry, such as requiring ships (including rigs and drillships) to comply with IMO and EU regulations relating to the collection and reporting of data relating to greenhouse gas emissions. In April 2018, the IMO adopted an initial strategy to, among other things, reduce the 2008 level of greenhouse gas emissions from the shipping industry by 50% by the year 2050. In July 2023, the IMO adopted a revised strategy that (i) includes as a goal attaining net-zero greenhouse gas emissions from international shipping by or around 2050, (ii) promotes the uptake of alternative zero and near-zero greenhouse gas emissions technologies, fuels and/or energy sources by 2030, and (iii) identifies as indicative checkpoints a level of ambition at least a 20% reduction, compared to 2008, in total annual greenhouse gas emissions from international shipping by 2030, and at least a 70% reduction by 2040, striving for reductions of 30% by 2030 and 80% by 2040. In furtherance of the IMO’s strategy to reduce greenhouse gas emissions from shipping,shipping. inIn OctoberApril 2024,2025, the Marine Environmental Protection Committee of the IMO announcedapproved proposeddraft regulationsamendments scheduledto forMARPOL adoptionAnnex inVI latereferred 2025to focusedas ona enhancingNet-Zero the energy efficiency of ships.Framework. The IMONet-Zero alsoFramework iswould discussing proposals to (i) setestablish a new global marine fuel standard providing for a phased reduction of theGHG greenhouse gasfuel intensity of marine fuel("GFI") and (ii) establish a marinenew greenhouseglobal gaseconomic measure/pricing mechanism.mechanism Inrequiring Januaryships 2025,that theemit Internationalabove ChamberGFI ofthresholds Shippingto joinedacquire with“remedial 47units” governmentsto balance any deficit emissions and allowing ships using zero or near-zero GHG technologies to be eligible to earn "surplus units", which could be banked and used in the submissionfuture ofor proposedsold languagefor touse by other ships. Remedial units can be secured from surplus units banked by the IMOship foror atransferred pricingfrom mechanismother that,ships commencingor inacquired 2028, would require shipping companies engaged in international voyages to makethrough contributions to a new “"IMO GHG Strategy ImplementationNet-Zero Fund”". basedThe onNet-Zero annualFramework greenhouseamendments gasto emissionMARPOL levels.Annex VI were originally scheduled for adoption in October 2025, with entry into force in 2027, 16 months after adoption, but the schedule for adoption has been delayed until October 2026, with the earliest anticipated entry into force in March 2028.

Beyond regulatory and financial impacts, the projected severe effects of climate change, including severe weather, such as hurricanes, monsoonsmonsoons, floods and other catastrophic storms, have the potential to directly affect our facilities, drilling units and operations and those of our customers and suppliers, which could result in more frequent and severe disruptions to our business and those of our customers and suppliers, increased costs to repair damaged facilities or drilling units or maintain or resume operations, and increased insurance costs. Additionally, the increasing attention to the risks of climate change has resulted in an increased possibility of litigation or investigations brought by public and private entities against oil and gas companies in connection with their greenhouse gas emissions. As a result, we or our customers may become subject to court orders compelling a reduction of greenhouse gas emissions or requiring mitigation of the effects of climate change.

As of December 31, 2024,2025, we had (i) $625 million aggregate principal amount of long-term debt and (ii) $225 million of committed availability for future borrowings under the Revolving Credit Facility (as defined herein), of which $225approximately $185 million was available.

Our capital allocation framework includes a goal of returning at least 50% of Free Cash Flow (defined as cash flows from operating activities minusless capitaladditions expendituresto drilling units and equipment) to our shareholders in the form of share repurchases or dividends. In connection with our capital allocation framework, in August 2023, the Board of Directors authorized a share repurchase program of $250 million, which was completed in December 2023. In November 2023 and May 2024, the Board of Directors authorized additional repurchases up to an additional $250 million and $500 million, respectively, taking the aggregate authorization to $1 billion. During 2024, the Company completed authorized additional repurchases of $527 million. The Company did not repurchase any Shares during 2025. Share repurchases and dividends are authorized and determined by our Board of Directors at its sole discretion and depend upon a number of factors, including market conditions, the Company’s financial position and capital requirements, financial conditions, and competing uses for cash, statutory solvency requirements, the restrictions in the Company’s debt agreements and other factors. The Company is under no obligation to purchase any Shares in respect of the share repurchase program, and we can provide no assurance that we will make share repurchases or pay dividends in accordance with our share repurchase program, capital allocation framework goal or at all. Any elimination of, or downward revision in, our share repurchase program, dividend payment plans or capital allocation framework could have an adverse effect on the market price of our Shares.

If drilling unit values fall significantly, we may have to record an impairment adjustment in our Consolidated Financial Statements, which could adversely affect our financial results and condition.

We conduct our operations through various subsidiaries in countries throughout the world. Tax laws, regulations and treaties are highly complex and subject to interpretation. Consequently, we are subject to changing tax laws, regulationsregulations, and treaties in and between the countries in which we operate, including treaties between the United States and other countries. Tax laws, regulations, and treaties are highly complex and subject to interpretation. Our income tax expense is based upon our interpretation of the tax laws in effect in various countries at the time that the expense was incurred. A change in these tax laws, regulations or treaties, including those in and involving the United States, and the Organization for Economic Co-operation and Development's ("OECD") Base Erosion and Profit Shifting 2.0 initiative,initiative ("Pillar 2,2"), and rules introduced by countries in response to Pillar 2 (such as Bermuda corporate income tax), or in the valuation of our deferred tax assets, which is beyond our control, could result in a materially higher tax expense or a higher effective tax rate on our worldwide earnings.

The United States enacted the Inflation Reduction Act on August 16, 2022. This law imposes, among other things, a 15% corporate alternative minimum tax on the adjusted financial statement income of certain corporations, and a 1% excise tax on certain corporate stock repurchases occurring after December 31, 2022. The United States also enacted the legislation commonly referred to as the One Big Beautiful Bill Act ("OBBBA") on July 4, 2025. This law includes a broad range of tax reform provisions affecting corporations, including, among other things, the permanent reinstatement of the "bonus" depreciation provisions that allow for the immediate expensing of 100% of the cost of certain qualified property acquired and placed in service after January 19, 2025, and the modification of certain international tax provisions effective for tax years beginning after December 31, 2025. While we believe thesethe tax law changes under the Inflation Reduction Act and OBBBA have no immediate effect on us and are not expected to have a material adverse effect on our results of operations going forward, it is unclear how they will be implemented by the U.S. Department of Treasury, and what actions, if any, the Trump Administration may take with respect thereto, and what, if any, impact theany other tax law changes or actions of the Trump Administration will have on our tax rate. We will continue to evaluate the impact of the Inflation Reduction Act,Act and OBBBA, and actions of the Trump Administration with respect thereto, as further information becomes available.

The discussion of our results of operations and liquidity in this section includes comparisons for the years ended December 31, 20242025 and December 31, 2023.2024. For a similar discussion, including comparisons for the yearyears ended December 31, 2023,2024 the periods from February 23, 2022 throughand December 31, 2022 (Successor) and from January 1, 2022 through February 22, 2022 (Predecessor),2023, see Part I,II, Item 5,7, "OperatingManagement's Discussion and Analysis of Financial ReviewCondition and ProspectsResults of Operations” of our annual report on Form 20-F10-K for the year ended December 31, 2023,2024, filed with the SEC on MarchFebruary 27, 2024.2025.

As of December 31, 2024,2025, we owned a total of 15 drilling units, of which 1110 were operating (inclusive ofoperating, one leased to the Sonadrill joint venture), one 6th generation drillship was undergoing contractcapital preparationsupgrade projects for a contract thatcommencing commencedin duringthe Februarysecond 2025,quarter of 2026, one was undergoing repairs and maintenance projects and three were cold stacked. The 1110 operating units include 10nine benign floaters (comprising sevensix 7th generation drillships, two 6th generation drillships and one benign environment semi-submersible) and one harsh environment unit (comprising of one jackup).jackup. In addition to our owned assets, as of December 31, 2024,2025, we managed two drilling units owned by Sonangol.

Overall, inIn recent years, oil prices have generally remained at levels that are supportive ofsupport offshore exploration and development activity, andwhere global rig demand has been steady. This level of demand has beenwas sustained by the combination of growing confidence in commodity prices, heightened focus on energy security, and relative attractiveness of offshore plays with respect to both cost and carbon emissions.

As a result, uncertaintyUncertainty persists in the market, whichparticularly isin primarilylight driven byof concerns over the global economic conditions.conditions, Suchgovernment concernstrade havepolicies and output increases by the OPEC and other major international producers. This has led to the continued deferral of offshore capital expenditures and contracting of offshore drilling services,services and could have a negative impact on near-term future demand for offshore drilling services, as the industry faces volatility in oil prices and growth trajectory for oil demand.services. In addition, inflationary pressures may impact the cost base in our industry, including personnel costs,costs and the prices of goods and services required to reactivate or operate rigs. As anticipated, 2025 was a year marked by softer utilization and a corresponding increase in competition, placing downward pressure on near term dayrates; however, as global tendering activity accelerates, we see signs that point towards a market recovery in 2027. In addition, we believe oil majors are calling for renewed focus on large-scale exploration and investment, and there is also growing consensus that U.S. shale production is plateauing. As a result, with projections of growing oil and gas demand and the lagging energy transition, operators are pivoting back towards deepwater exploration in order to replace reserves and sustain production growth.

The below table shows the global number of rigs on contract and marketed utilization for the yearyears ended December 31, 2024,2025 and forDecember each31, of the four preceding years.2024:

Source: S&P Global.RigLogix

Global benign-environmentbenign environment floaters

The below table shows the number of owned drilling units included in our fleet for each of the periods covered by this report.report:

The decrease in benign environment jackup rigs during 2024 was due to the disposal of the West Castor, West Tucana, West Telesto and West Prospero. The increase in our owned fleet in 2023 was due to the acquisition of Aquadrill.

Our contract backlog includes only firm commitments represented by signed drilling contracts. The full contractual operating dayrate may differ tofrom the actual dayrate we ultimately receive. For example, an alternative contractual dayrate, such as a waiting‑on‑weather rate, repair rate, standby rate or force majeure rate, may apply under certain circumstances. The contractual operating dayrate may also differ tofrom the actual dayrate we ultimately receive because of several other factors, including rig downtime or suspension of operations. In certain contracts, the dayrate may be reduced to zero if, for example, repairs extend beyond a stated period.

The tables included below set out financial information for the years ended December 31, 20242025 and December 31, 2023 (Successor).2024.

Contract revenues represent the revenues we earn from contracting our drilling units to customers, primarily on a dayrate basis, and are primarilypredominately driven by the average number of rigs under contract during a period, the average dayrates earned and economic utilization achieved by those rigs under contract. We have set out movements in these key indicators of performance in the sections below.

We calculate the average number of rigs on contract by dividing the aggregate days our rigs (excluding managed rigs) were on contract during the reporting period by the number of days in that reporting period.

TheseThe decreasesincrease werewas partiallyprimarily offsetrelated byto the West CapellaAuriga and West VelaPolaris having commenced work in Brazil in December 2024 and February 2025, respectively, and therefore, were operating for more days during the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, asalong with the rigsSevan wereLouisiana acquiredand inWest AprilNeptune 2023operating asfor amore partdays ofduring the Aquadrillyear acquisition.ended December 31, 2025 due to special periodic survey activities during the year ended December 31, 2024.

We define economic utilization as dayrate revenue earned during the period, excluding bonuses, divided by the contractual operating dayrate multiplied by the number of days on contract in the period. If a drilling unit earns its full operating dayrate throughout a reporting period, its economic utilization would be 100%. However, there are many situations that give rise to a dayrate being earned that is less than athe contractual operating rate, such as planned downtime for maintenance. In such situations, economic utilization reduces below 100%.

EconomicThe economic utilization increasedwas 90% for the year ended December 31, 2025, compared to 95% for the year ended December 31, 2024, compared to 93% for the year ended December 31, 2023, resulting in a $24$37 million increasedecrease in contract revenues in the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. The increasedecrease during the year ended December 31, 2025 was primarily due to plannedunplanned downtime and operational events related to blowoutregulatory preventermatters reliabilityimpacting the West Tellus and weather-related impactsdowntime on certainthe rigsWest withinPolaris, West Auriga, West Elara, West Carina and Sevan Louisiana, partially offset by improved economic utilization on the fleetWest inNeptune, 2023.West Saturn and West Jupiter compared to the year ended December 31, 2024.

We receive fees for the mobilization of our rigs, where the associated revenue is recognized ratably over the expected term of the related drilling contract. As a result, we record a contract liability for mobilization fees received, which is amortized ratably to contract drilling revenuerevenues as services are rendered over the initial term of the related drilling contract.

AmortizationThe amortization of deferred mobilization revenues decreasedincreased by $19$27 million during the year ended December 31, 2024,2025, compared to the year ended December 31, 2023.2024. ThisThe increase was primarily relatedattributable to mobilization fees received on the West Capella, West Polaris and West Phoenix,Auriga, aswhich theircommenced respectiveoperations contractswithin endedthe inlast 2024.13 months.

For the yearyears ended December 31, 2025 and December 31, 2024, reimbursable revenues primarily related to rigs managed for the Sonadrill joint venture for long term maintenance projects on the Libongos and Quenguela, andalong forwith the year ended December 31, 2023,some reimbursable revenues related to services provided across various customers.

The increase$12 million decrease for the year ended December 31, 20242025 compared to the year ended December 31, 20232024 was primarily due to additionalreduced reimbursable services provided to the Libongos and Quenguela for long-term maintenance.maintenance during the year ended December 31, 2025, compared to the year ended December 31, 2024.

Management contract revenues include revenues related to contracts where we provide management, operational and technical support services and compriseare revenuecomprised of revenues from our joint venture, Sonadrill, relating to the Libongos, Quenguela and the West Gemini.

Management contract revenues for the year ended December 31, 20242025 wereincreased relativelyby consistent$7 withmillion compared to the year ended December 31, 2023.2024, Anprimarily increasedriven inby higher management fees and add-on services on the three Sonadrillmanaged rigs during the year ended December 31, 2024 of $16 million, was offset by a $14 million decrease in management services provided to SeaMex during the year ended December 31, 2023, which ended in November 2023.rigs.

Refer to Note 2421 - "Related party transactions" for further details on these related parties.details.

Leasing revenues relate to the charter of the West Gemini to Sonadrill and the West Castor, West Telesto and West Tucana to Gulfdrill prior to their disposal in June 2024, and West Gemini to Sonadrill.2024.

The increase to leasingLeasing revenues ofdecreased by $21 million for the year ended December 31, 2024,2025 compared to the year ended December 31, 2023, is2024, primarily due to an amended bareboat charter rate for West Gemini, retroactively effective from January 1, 2024, as well as a higher bareboat charter rate for the West Castor, which was effective in September 2023, partially offset by a decrease of leasing revenues attributable to the disposal of the Gulfdrill rigs, disposedrigs in June 2024.

We are an offshore drilling contractor providing worldwide offshore drilling services to the oil and gas industry. Our primary business is the ownership and operation of drillships and semi-submersibledrilling rigs for operations in shallow to ultra-deepwater in both benign and harsh environments. We contract our drilling units to drill wells for our customers on a dayrate basis. Our customers include oil super-majors, state-owned national oil companies and independent oil and gas companies. In addition, we provide management services to certain affiliated entities.

As of MarchJune 31,30, 2026, we owned a total of 15 drilling rigs. In addition to our owned assets, as of MarchJune 31,30, 2026, we managed two 7th generation drillships owned by Sonangol EP.

The price of oil has experienced increased volatility and has risen in response to the ongoing conflicts in the Middle East, including the current conflict in Iran, which started on February 28, 2026, and the unprecedented closureblockades of the Strait of Hormuz.Hormuz resulting therefrom. The Brent oil price was $71 per barrel on February 27, 2026 and increased to an average price of approximately $103 per barrel for the monthsecond quarter of March 2026. We continue to evaluate and monitor the impacts of the recent oil price volatility and the ongoing conflicts in the Middle East on our business and operations; however, it is not possible to predict the long-term impact, if any, of the disruptions to commodity prices, global energy supplies, energy markets and economic conditions, on our business and operations.

We estimate the MarchJune 31,30, 2026 contract backlog to be realized over the following periods:

The table below shows the average oil price for the threesix months ended MarchJune 31,30, 2026 and year ended December 31, 2025. The Brent oil price as of MayAugust 6, 2026 was $101$82/bbl.

The price of Brent oil averaged $78$88 per barrel during the threesix months ended MarchJune 31,30, 2026 up from $68an average of $70 per barrel in 2025, driven primarily by ongoing conflicts in the Middle East that disrupted global oil supply during the first quarterhalf of 2026.

Uncertainty persists in the market, particularly in light of concerns over global economic conditions (including the current conflict in Iran), government trade policies and output increases by the Organization of the Petroleum Exporting Countries and other major international producers. This has led to the continued deferral of offshore capital expenditures and could have a negative impact on near-term future demand for offshore drilling services. In addition, inflationary pressures may impact the cost base in our industry, including personnel costs and the prices of goods and services required to reactivate or operate rigs.

The table below shows the global number of rigs on contract and marketed utilization for the threesix months ended MarchJune 31,30, 2026 and year ended December 31, 2025:

Marketed utilization and the number of contracted rigs remained relatively consistent in the threesix months ended MarchJune 31,30, 2026 compared to the year ended December 31, 2025.

Marketed utilization for harsh environment floaters improved in the threesix months ended MarchJune 31,30, 2026 compared to the year ended December 31, 2025, whereas utilization for harsh environment jackups remained relatively consistent over the same periods, reflecting continued demand for high-specification assets.

Results for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025

The tables included below set out financial information for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025:

The average number of rigs on contract remained consistent at nine10 in each of the three months ended MarchJune 31,30, 2026 and 2025; however, there was aan decreaseincrease in the total days on contract resulting in lowerhigher contract revenues of $11 million in the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025.

The decreaseincrease was primarily driven by fewer operating days on the West Jupiter, West Capella and Sevan Louisiana, which were undergoing contract preparation activities during the three months ended March 31, 2026 forwith contracts that started duringin March 2026 in Brazil, Malaysia and the U.S. Gulf of America, respectively, compared to the three months ended MarchJune 31,30, 2025, during which the rigs were operating for moreless days. The decreaseincrease was partially offset by the West Neptune and West Polaris,Tellus operating throughoutfor fewer days during the three months ended MarchJune 31,30, 2026, due to contract preparations for its new contract that started in June 2026 in Brazil, compared to being partiallyfully contracted during the three months ended MarchJune 31,30, 2025.

The average contractual dayrate earned during the three months ended MarchJune 31,30, 2026 was $343$360 thousand compared to $323$331 thousand during the three months ended MarchJune 31,30, 2025, resulting in a $5$24 million increase in contract revenues in the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025.

The increase was driven by higher dayrates for the West Jupiter, West Auriga,Tellus, West Polaris, West TellusAuriga, and West Carina operating in Brazil, and the West Neptune operating in the U.S. Gulf of America, and the West Elara operating in NorwayAmerica during the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025. These impacts were partially offset by lower dayrates for the West Vela and Sevan Louisiana operating in the U.S. Gulf of AmericaAmerica, and the West Polaris operating in Brazil during the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025.

The economic utilization for the three months ended MarchJune 31,30, 2026 was 95%,96%, compared to 84%93% for the three months ended MarchJune 31,30, 2025, resulting in a $36$8 million increase in contract revenues in the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The increase was primarily due to improved economic utilization on the West Tellus,Polaris and West Polaris, West Auriga and Sevan LouisianaElara during the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. This was partially offset by downtime on the West Saturn during the three months ended June 30, 2026.

The amortization of deferred mobilization revenues decreasedincreased by $1$9 million during the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025. The decreaseincrease was primarily attributable to mobilizationrevenues feesrelated received onto the West CapellaElara recognized during the firstthree quartermonths ended June 30, 2026, along with mobilization fees related to West Jupiter and West Capella following the start of 2025.their contracts in March 2026.

For the three months ended MarchJune 31,30, 2026 and the three months ended MarchJune 31,30, 2025, reimbursable revenues primarily related to rigs managed for the Sonadrill joint venture for long-term maintenance projects on the Libongos and Quenguela, along with reimbursable revenues related to services provided across various customers.

The $5$3 million decreaseincrease in the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025 was primarily due to reducedadditional reimbursablehired servicesequipment provided toon the WestSevan Gemini and QuenguelaLouisiana during the firstsecond quarter of 2026, compared to the firstsecond quarter of 2025.

Total operating expenses include vessel and rig operating expenses, reimbursable expenses, depreciation of drilling units and equipment, amortization of intangibles, management contract expenses, and selling, general and administrative expenses, and merger and integration related expenses.

Vessel and rig operating expenses increased by $2$35 million during the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. During the three months ended March 31, 2026, thereThere was ana $9$43 million increase in vessel and rig operating expenses primarily related to the West Capella commencing operations in Malaysia in March 2026, along with higher integrated services, repair and maintenance and personnel costs during the three months ended June 30, 2026 compared to the three months ended MarchJune 31,30, 2025, primarily related to the West Polaris commencing operations in February 2025 in Brazil, along with higher repair and maintenance costs across the fleet.2025. This was partially offset by aan $7$8 million decrease in vessel and rig operating expenses during the three months ended MarchJune 31,30, 2026, attributable to lowerthe deferredWest mobilizationTellus costspreparing relatedfor its contract that started in June 2026 in Brazil, compared to contractsoperating in Brazil completing duringthroughout the firstthree quartermonths ofended 2026.June 30, 2025.

The $16 million increase in depreciation and amortization for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025 is mainly attributablerelated to long-term maintenance and capital projects across the fleet, and unfavorable contracts recorded as liabilities being fully amortized during 2025.

Depreciation increased by $11$12 million in the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, mainly attributable to long-term maintenance and capital projects across the fleet, primarily related to the West Neptune, West GeminiVela, West Gemini, West Capella and Sevan Louisiana during the second half of 2025.Louisiana.

Amortization increased by $5$4 million during the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, mainly attributable to unfavorable contracts recorded as liabilities being fully amortized during 2025 related to the West Tellus, West Jupiter and West Carina.

c) Selling,Management general and administrativecontract expenses

Selling,Management generalcontract andexpenses administrative expense increaseddecreased by $2$51 million during the three months ended MarchJune 31,30, 20262026, compared to the three months ended MarchJune 31,30, 2025, primarily dueattributable to personnelestimated costsdamages andrecognized professionalfollowing fees.the unfavorable court judgment related to fees for arranging the Sonadrill joint venture in the three months ended June 30, 2025, not recurring in the three months ended June 30, 2026.

We incurincurred interest on our debt facilities as summarized below: